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Fed Chair Jerome Powell. Photo: Joshua Roberts/Getty Images

No one could have predicted that it would take two hours for a member of the Senate to prod Fed Chair Jerome Powell about the Fed's political independence — or that the U.S. deficit would be such a central point of yesterday's hearing.

Why it matters: Powell answered a handful of questions about the U.S. debt and then chimed in on the modern monetary theory debate — whether or not deficits matter for countries like the U.S. that print their own money.

"The idea that deficits don't matter for countries that can borrow in their own currency I think is just wrong ... U.S. debt is fairly high to the level of GDP — and much more importantly — it's growing faster than GDP, really significantly faster. We are going to have to spend less or raise more revenue."
— Powell, in response to Sen. David Purdue's question about MMT

The caveat: Powell called out "unsustainable" federal debt in his opening remarks. But in response to questions from senators, he emphasized that "decisions about spending and controlling spending and paying for it" are up to Congress, not the Fed.

What's next: Powell will face the House Financial Services Committee — the first Democratic-controlled body of Congress he's seen since becoming chairman — at 10 am ET.

Go deeper: Fed's Powell sees "conflicting signals" in economy

Go deeper

Dion Rabouin, author of Markets
27 mins ago - Economy & Business

The fragile recovery

Data: Department of Labor; Chart: Axios Visuals

The number of people receiving unemployment benefits is falling but remains remarkably high three weeks before pandemic assistance programs are set to expire. More than 1 million people a week are still filing for initial jobless claims, including nearly 300,000 applying for pandemic assistance.

By the numbers: As of Nov. 14, 20.2 million Americans were receiving unemployment benefits of some kind, including more than 13.4 million on the Pandemic Unemployment Assistance (PUA) and Pandemic Emergency Unemployment Compensation (PEUC) programs that were created as part of the CARES Act and end on Dec. 26.

Ben Geman, author of Generate
47 mins ago - Politics & Policy

The top candidates Biden is considering for key energy and climate roles

Photo: Alex Wong/Getty Images

Senate Minority Leader Chuck Schumer (D-N.Y.) has urged President-elect Joe Biden to nominate Mary Nichols, chair of California's air pollution regulator, to lead the Environmental Protection Agency, Bloomberg reports.

Why it matters: The reported push by Schumer could boost Nichol's chances of leading an agency that will play a pivotal role in Biden's vow to enact aggressive new climate policies — especially because the plan is likely to rest heavily on executive actions.

U.S. economy adds 245,000 jobs in November as recovery slows

Data: BLS; Chart: Axios Visuals

The U.S. economy added 245,000 jobs in November, while the unemployment rate fell to 6.7% from 6.9%, the government said on Friday.

Why it matters: The labor market continues to recover even as coronavirus cases surge— though it's still millions of jobs short of the pre-pandemic level. The problem is that the rate of recovery is slowing significantly.